Getting legal advice

Raj Dhokia

The Legal Advice column in Bridal Buyer answers your questions about issues that affect your business. Here’s one question that Raj Dhokia recently helped with about shop premises…

My landlord has approached me with the suggestion that I buy my premises (my shop has been there for two decades). The price he wants seems fair but I am concerned that when I am no longer here that the value becomes part of my Estate and my daughter, therefore, will be faced with a high Inheritance Tax bill. What is the most sensible way forward?

Firstly, unless there is contractual documentation to say otherwise, there is no obligation for you to buy the premises. That should be a commercial decision rather than a legal one. Secondly, if you decide to go ahead with the purchase then it would be sensible to take specific legal advice from a solicitor on how best to structure the purchase given the IHT issues you have raised. If you own your business through a limited company, that raises additional issues such as whether any purchase should be in your or the company’s name. Alternatively, if you are a sole trader, then consideration should be given to whether the purchase should be in your daughter’s name in which case it would fall outside your Estate and therefore IHT could be avoided.

This is a good opportunity to consider your Will and undertake some succession planning. A solicitor would be able to review all your assets and liabilities with a view to establishing whether your Estate will be taxable and advise on minimising any tax.

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